The Kenyan shilling weakened on Tuesday as importers sought dollars to pay their bills, but traders said tight liquidity was limiting the local currency's losses while caution reigned before a central bank policy meeting later in the day.

"There's slight (dollar) demand in the market, though the tight liquidity is slowing down the process of weakening. Demand is from all sectors, all importers," a senior trader at one commercial bank said.

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In a sign of the scarcity of shilling liquidity, the weighted average interbank lending rate rose to 25.2328 percent on Monday from 24.5569 percent on Friday.

Traders said the shilling was otherwise expected to trade in a narrow range while the market awaited the outcome of the central bank's Monetary Policy Committee meeting on Tuesday.

Thirteen of 15 analysts polled by Reuters forecast that the bank will keep its benchmark lending rate at 11.50 percent.